“The private sector added 179,000 jobs in July, payroll processor ADP said Wednesday, possibly signaling that the Labor Department will report a second straight month of solid employment gains this week.” Story at…
http://www.usatoday.com/story/money/2016/08/03/adp-businesses-added-solid-179000-jobs-july/87976978/
ISM SERVICES (Marketwatch)
“Companies in the U.S. that offer services, such as health care, retail goods and entertainment, grew, albeit at a slightly more subdued pace, in July, though they are not adding as many new workers as they were at the end of last year, according to a survey of senior executives. The Institute for Supply Management said its nonmanufacturing index fell to 55.5% last month from 56.5% in June. Story at…
http://www.marketwatch.com/story/at-your-service-most-us-firms-still-growing-ism-finds-2016-08-03
My cmt: A number above 50 indicates growth.
CRUDE INVENTORIES (Reuters))
“Oil prices jumped more than 3 percent on Wednesday, with U.S. crude futures returning to above $40 a barrel, after a larger-than-expected gasoline draw offset a surprise build in crude stockpiles...” Story at…
http://www.reuters.com/article/us-global-oil-idUSKCN10E035
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.3% to 2164.
-VIX rose about 4% to 12.86.
-The yield on the 10-year Treasury remained 1.54%.
Not much different today – the short term trend looks to be down.
I said yesterday that if there was a big bounce up Wednesday, I might cut my invested position to 30% (down from 40%). The day was up, but not particularly big (I want to see a statistically significant day) so I kept my stock allocation at 40%.
Market Internals on the NYSE continue to fall faster than the S&P 500 and this usually indicates a pullback.
My 10-day sum of 16 indicators declined from -22 to -28 Wednesday, so indicators are getting worse on a 10-day basis. Internals don’t look good either and the trend in new-highs / new-low data continues down. If there is going to be a significant pullback, new-high, new-low data needs to go negative on the spread. The spread is not there yet, but new-hi/new-low data is rolling over and this usually precedes a downturn.
I’m still guessing we see a pullback in the 5% range. Perhaps it is getting underway now.
VXX TRADE
My numbers didn’t support taking a position, but they again came somewhat close to a VXX buy signal Wednesday. (For background on a possible VXX Trade see Friday’s blog.) If the market moves up slowly on low volume perhaps that VXX buy signal will fire. We’ll see.
SHORT TRADE
I am still holding short positions.
MONEY TREND INDICATOR
My short-term Money Trend indicator can be volatile; Wednesday it remains pointing sharply down; a bearish indication.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to a whisker below 50% Wednesday. It was 49.9% Tuesday. A number below 50% is usually BAD news for the markets.
On a longer term, the 150-day moving average of advancing stocks remained 53.4%. A value above 50% generally indicates an up-trend. The McClellan Oscillator (a Breadth measure) improved from -48 (percentage calculation method) to -30.
New-highs outpaced New-lows. The spread (new-highs minus new-lows) rose to +82 Wednesday. (It was +76 Tuesday.) The 10-day moving average of the change in spread dropped to -9. In other words, over the last 10-days, on average; the spread has decreased by 9 each day. Market Internals remained negative on the market.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2014, using these
internals alone would have made a 9% return vs. 13% for the S&P 500 (in on
Positive, out on Negative – no shorting).
LONG TERM INDICATOR
Wednesday, the Price indicator was positive; Sentiment, Volume and VIX indicators were neutral. The long-term indicator is HOLD.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATIONOn 12 July I increased my invested position in my retirement account to 25% invested in stocks thru an S&P 500 Index fund (“C”-fund in the TSP). I added to that position Thursday 21 July bringing my invested total up to 40% in stocks. I expect to add more stocks should we get the anticipated pullback.
The NTSM system indicated Buy at the 11 Feb bottom; and again 2-days after the bottom on high up-volume; and from 22 Feb thru 25 April. I ignored the early signals convinced that it was a bear market bounce; I ignored more recent signals due to overbought conditions. I’m following my system now, especially since the Index has climbed above my initial sell-point of 2100 on the S&P 500 back in November 2015.
